Today: Facebook closed at its highest price since July thanks to two new initiatives showing its mind is on its money. Also: Sunnyvale's Ruckus Wireless brings in a solid IPO haul, but stock falls in first session as Wall Street ekes out a gain.
Facebook gains more than 20 percent in one week with focus on revenue
Facebook closed Friday at its highest price since late July, as the Menlo Park social network continued to focus on wringing more revenue out of its popular service, to the delight of investors.
In a week that some prognosticators thought Facebook would face trouble due to the largest wave of shares to hit the market yet, following its record-breaking initial public offering, the stock instead rose 22.6 percent, capped off with a 6.3 percent rise Friday.
A possible catalyst for Facebook's positive movement Friday was another move to satisfy advertisers, as the company announced it had devised a system that allows companies to track purchases made by Facebook users who saw ads on the social network. The anonymous information would allow companies to better track the effectiveness of Facebook ad campaigns, giving the company hard data to woo paying customers.
"Measuring ad effectiveness and outcomes is absolutely crucial to all types of businesses and marketers," David Baser, a Facebook advertising product manager, told Reuters.
That move follows Facebook's foray into e-commerce, Facebook Gifts. That program, which allows members to purchase gifts for Facebook friends through the social network, expanded to all of North America with new retail partners Friday, after launching in September on a limited basis.
Sterne Agee & Leach analyst Arvind Bhatia said the expanded Facebook Gifts is "a good first step to get into e-commerce."
"In the near term, I don't expect Facebook to be selling televisions or appliances, but there are certain categories like flowers, chocolate and wine where they could add revenue," he told Bloomberg News.
Two efforts focused on monetization on the heels of Facebook's most recent earnings report, which showed the first hint of mobile revenue, has helped change the conversation on the stock from its post-IPO weakness to its ability to grow revenue to justify the $38 price Facebook received for IPO shares.
"People are much more comfortable with the direction and fundamentals of the company" than earlier in the year, Bhatia told the Mercury News earlier this week.
Topeka Capital Markets analyst Victor Anthony agreed, telling Bloomberg News, "Some of the investors are thinking the worst is behind Facebook and now is maybe the time to go long on the stock."
Ruckus Wireless falls more than 18 percent after $126 million IPO
Facebook's overpriced IPO was on the minds of many Friday, but not in regards to the company's own stock. Rather, another Silicon Valley tech company went to market with shares that investors seemed to feel were priced incorrectly, as Sunnyvale enterprise-wireless company Ruckus Wireless saw its shares drop more than 18 percent in its first day of public trading.
Ruckus had presented a possible price range for its stock as $13 to $15, and chose the highest point of that range to sell 8.4 million shares, which brought in more than $126 million at a valuation slightly higher than $1.2 billion. However, shares dropped as soon as they hit the New York Stock Exchange, and a late dip gave Ruckus a closing quote at its lowest point of the day, $12.25, an 18.3 percent slide.
"Ruckus Wireless overreached on pricing despite weak market conditions, and stock fell today due to mostly overall market conditions," PrivCo CEO Sam Hamadeh wrote in an email.
Ruckus has to compete with large companies with a range of enterprise offerings, such as Cisco (CSCO), as well as smaller companies targeted on its Wi-Fi offerings, like Sunnyvale neighbor Aruba Networks. Ruckus has looked overseas amid the competition, with foreign purchases making up the majority of the company's rapidly growing revenue stream, but Europe's recession and China's slowing growth casts doubts on the company's ability to continue to produce profits.
The first-day crumble should be a reminder to other companies looking to go public -- of which there could be many this quarter -- not to ignore the macroeconomic picture when choosing an IPO price, Hamadeh said.
"It should be a lesson for private companies with IPOs in the pipeline: Best to leave a little money on the table and a positive narrative than have us now talking about a 'busted IPO' -- which Ruckus Wireless is," Hamadeh wrote.
"Busted" or not, Ruckus CEO Selina Lo is convinced the company will succeed on the public market.
"We believe there's strength in our stock," she told Bloomberg News. "Despite the bumps here and there, we think the stock will sustain and grow over time."
Wall Street makes slight gains, PC companies continue to struggle
A bad week for Wall Street managed to end on a slightly cheery note Friday, despite the fall of the newest tech stock. All three major U.S. stock indexes pushed higher on the day, as a meeting between President Barack Obama and congressional leaders on the "fiscal cliff" gave investors hope that politicians would settle their differences sooner rather than later.
"If you continue to see reports like this, and not just talk but hard numbers and hard plans, the market will get a little more comfortable that something constructive will happen," Ryan Larson, head of equity trading at RBC Global Asset Management, told The Wall Street Journal.
In Silicon Valley, the SV150 index of the region's largest tech companies rose in about the same manner as the major U.S. indexes, gaining 0.4 percent.
Apple (AAPL) bounced back slightly from its recent weakness, which has pushed the stock into "bear market" territory and out of the $500 billion market cap club, gaining 0.4 percent despite concerns about higher capital gains taxes harming Apple shareholders. The company's court battles against Samsung, which produces smartphones and tablets running Google's (GOOG) Android operating system, continued -- both companies added gadgets to their second San Jose patent trial, while Samsung attempted to obtain more details about its Cupertino-based rival's deal with HTC.
Google stayed flat despite reports that it is readying a new Maps app for Apple mobile devices and discussing a new wireless initiative with Dish Network. The Mountain View search giant seems to be on its way to a final settlement with the FTC on its privacy issues with cookies inserted in the Safari browsers of Apple users, though the antitrust lawsuit threats continue to hang around.
In the struggling personal computer sector, Dell plunged to a three-year low after its Thursday earnings report showed drastically reduced revenues, though the company tried to change the narrative by announcing the acquisition of Santa Clara enterprise-services company Gale Technologies. The only larger PC manufacturer in the U.S., Palo Alto tech giant Hewlett-Packard (HPQ), continued to delve to decade-low prices, falling as low as $12.36 before closing at $12.85, a 1.7 percent decline. Sunnyvale chipmaker Advanced Micro Devices fell another 0.5 percent as it considers a reorganization that could reportedly include more job cuts.
Silicon Valley tech stocks
The tech-heavy Nasdaq composite index: Up 16.19, or 0.57 percent, to 2,853.13
The blue chip Dow Jones industrial average: Up 45.93, or 0.37 percent, to 12,588.31
And the widely watched Standard & Poor's 500 index: Up 6.55, or 0.48 percent, to 1,359.88
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.